Previously we looked at various methods to increase profits which included how to identify lack of appropriate knowledge, getting your priorities straight, providing your staff with tools to thrive and knowing your worth. Here we will revisit the theme and focus on a few other areas as well, without losing sight of your number one priority which is of course leasing space.
Make it part of your process
Successful self storage operators unearth opportunities to increase revenue, even in the slowest periods or most financially challenging times. They know that every dollar increases value, that their efforts to boost revenue is worthy of their time and creating this routine for themselves and their staff is a worthwhile exercise. There are certain things that are fairly uncomplicated to make part of your process, habit or routine…Consider the following:
1. Direct Debit
Direct debit is a simple way to collect regular rent from customers. It is something that you can set up at the time of sign-up, it is an automatic procedure whereby the funds are deducted by the bank and not subject to human deliberation (it eliminates the ‘will I or won’t I pay this month?’) and once it is locked away customers rarely alter this payment method until they move out. If you are not currently using Direct Debit as part of your sign-up process…why not?
2. Selling insurance
This is an effective way to increase revenue as it is standard practise that you would buy the insurance and sell it at a premium to the customer. In the end, you are providing the customer with a service that will benefit them and yourself. (Their items are insured and they won’t have a bone to pick with you if their items are damaged).
3. Making assumptions
This is the way in which you sell these two things. It’s as simple as the language that you use and the fact that you make it a habit. For example, never ask the customer a question that they may answer ‘yes’ or ‘no’ to as this could lead to a wasted opportunity, such as when you ask ‘do you need insurance?’ and they say ‘no, I don’t’. You will have greater success with an open-ended question or leading statement such as ‘most of our customers use Direct Debit because…(now sell the benefits)’ OR ‘what kind of insurance do you require?’. This type of phrasing tends to direct the customer to make an assumption in their own mind about what you have suggested. After all, they are already in the frame of mind to make a purchase as they have just decided to store with you and there is no better time than NOW to offer them Direct Debit and insurance.
Another tactic is a non-verbal, yet highly effective one. Self storage managers have had huge success with offering the new customer their contract to sign in one hand and their insurance or direct debit agreement in the other hand. You will be surprised at how many customers sign both without question. Using these simple revenue management tactics at your self storage site not only adds value to your business, but increases the revenue earned from each customer and ensures the same prediction for further customers. Who wouldn’t want that?
4. Improve your rent collections
There is one commitment that should be made on your part that could indeed improve your rent collection from your customers. It is something that many self storage operators find difficult to do..not waiving late fees. Ever. The late fee has been earned by the customer and is legitimate (so long as you are charging an amount that corresponds with the costs incurred on your part in chasing them up). If you are running a business and impose certain rules then it is your job not to cave in and to enforce these rules without negotiation. The rule you have for a good customer should be the same rule you have for a bad customer.
Why reward a late paying customer with waiving the late fee simply because they have made a fuss? If you waive it once, they will almost certainly expect you to do so again. Imagine telling a customer ‘if your payment is late a late fee will be automatically deducted from their bank account, but you will waive the late fee…’ Sounds pretty wishy-washy, doesn’t it?
It can be tempting to please the customer but the actual possibility of them terminating their contract because of a late fee is almost nil. They will, however, undoubtedly want to avoid paying that late fee ever again (no matter how small). Try to remember, the message is worth more than the late fee you have collected.
5. Why bother with it?
Why bother with all this, you ask? Is it really going to make a difference? The answer is yes! As an owner or manager, you should be focussed on all that goes on with your site and this takes discipline. Maintaining discipline can be tedious but it will pay rewards in the long-run. It takes discipline to run your site as if you wanted to sell it tomorrow. It takes discipline to stop being on auto-pilot and take responsibility for increasing the value of your business.
However, constant evaluation and improvement on findings is the easiest way to increase your profits. Discipline puts operational systems into place, so you know even if you are away from the business (at a conference or family vacation), the wheels keep turning. This leads to accountability and gaining a clearer insight into what needs to be done to accomplish the businesses goals. And of course, let’s not forget about market positioning…this is where you clearly define your self storage facility’s place in the market as a force to be reckoned with.